Diane Mastrull: Montco tree business seeks to go national

Josh Skolnick (left), founder of Monster Tree Service in Fort Washington, attaches the cables that will wrap around the tree as it is being cut. He got into the business almost by accident.

By Diane Mastrull, Inquirer Columnist

Posted: October 02, 2012

Growing a tree-service business that now has more than $1 million in revenue and is on the verge of something way bigger - becoming the first U.S. franchise of its kind - is not at all what Josh Skolnick had planned when he responded to a call for help four years ago.

Skolnick was just doing a favor for a frantic father of young girls when the Fort Washington native responded to a request in June 2008 to take down a dead elm.

Back then, trees weren't Skolnick's thing. Lawns and mulch were.

By the time he graduated from Upper Dublin High School in 2002, Skolnick was "making over six figures" from a lawn-cutting/snow-removal business he had started when he was 10 or 11.

When most of the Fort Washington native's friends were in college, Skolnick was investing $200,000 in a high-powered mulch blower, sensing opportunity in commercial mulch installation.

It was a solid hunch. By spring 2005, he owned three machines and was "blowing mulch from Long Island, N.Y., to Northern Virginia." By 2007, Skolnick had national accounts installing not only mulch, but playground chips as well.

"It was so large, I ended up selling my landscaping business," Skolnick said, declining to disclose how much he got for it in deference to the local buyer's privacy.

Which brings us to the call in 2008 from the former lawn-care client with the 70-foot elm that needed to be brought down before it fell down. Skolnick said he referred him to two tree-removal specialists who turned out to be either disinterested or too expensive.

Not one "to pass up opportunity," Skolnick - who had never personally taken down a tree at that point and still hasn't - assembled a crew and equipment, including an 18-inch chain saw. The tree climber he hired for the job scoffed at the saw, noting that the elm's base measured 42 inches across. So Skolnick went shopping, buying a more suitable saw and related equipment for $2,200 - for a $2,500 job.

All the commotion attracted curious neighbors, many of whom had tree needs of their own. By the end of that Saturday, Skolnick had lined up 13 jobs worth $20,000.

"That Monday," he recalled last week, "we were in the tree business."

But not the one-guy-and-a-truck sort of business that dominate the industry. In his first four months, Skolnick had invested $1 million in equipment - big equipment, because his business plan was premised on efficiency. No climbing an 80-foot tree and taking most of a day to cut it down when a 35-ton crane with a 100-foot-plus boom - along with bucket trucks and chippers - could get the job done in 90 minutes, Skolnick figured.

To further distinguish Monster Tree Service from competitors, Skolnick has dedicated his company exclusively to tree service. And instead of following the industry-standard marketing practice of relying on referrals, Skolnick has relied on aggressive marketing, including lawn signs, direct mail, and the Internet.

He has had extraordinary financial success, by his account and those who have seen Monster's books. The Chalfont resident, 29, and father of two wants even more of it. So Monster's founder is, in tree-speak, branching out.

Or so he hopes. He is taking his tree-service company of 24 employees down an expansion road more traditionally traveled by food-related and personal-improvement businesses. Think Rita's Water Ice, Hollywood Tans, the Goddard School.

Industry specialists say Monster would be the first tree-service franchise in the country.

"It's not something people think about every day - cutting down trees," said Steven Beagelman, CEO and founder of SMB Franchise Advisors in Doylestown, consultants to Skolnick. "It really is a big, big business, and I had no idea how big."

Beagelman said that when he first heard from Skolnick last fall, "I was just blown away by the numbers."

He attributes Monster's lucrative performance to "pretty significant" profit margins. Monster's franchise-disclosure document shows that in 2011, it had $589,222 in EBITDA (earnings before interest, taxes, depreciation, and amortization) on sales of $1.46 million.

Mark Elson, 45, of Newtown, a franchise veteran and now Monster's director of franchise development, said that he was not guaranteeing that level of financial performance for potential franchisees, but that the opportunity was vast.

"No one really owns this industry," Elson said. "The opportunity is just phenomenal to be the household name."

Monster went to market in earnest in June at the International Franchise Expo in New York. Skolnick anticipates selling 150 franchise units within eight years. The franchise fee is $39,995, but total investment per owner could reach close to $500,000 when financing for equipment and office rental, and the cost of marketing and insurance are factored in, Elson said. Every territory has a population of 250,000.

If a network of 150 franchises can be achieved, annual Monster sales should reach $100 million, Skolnick said. Each franchisee will be assessed a royalty fee of about 6.5 percent on gross sales.

So far, a few territories on the East Coast have been awarded, but no franchises opened.

"It's a very tedious process to sell a franchise," said Skolnick, who added that most of the interest so far had come from CEOs being downsized out of jobs. "If we accept someone into the system that isn't going to work, it's going to bring us down."